I see that alot of breaking news during this market turmoil on finance.yahoo.com . This is one today. The SEC extended the short selling ban at least until Oct 17. So they can carry out the bailout measure. Seriously, i dont think that ban can work if a company is in deep trouble, example case will be Wamu & Wachovia where their price plunge with the absent of short seller.

I still think banning it will make things worst. Something like Bursa Msia. Stock price is all about perception. If tiny big players(aka big fishes) thinks it is worth dirt, then the small fish will think it so also. The only way to challenge the big fishes, it to able to shortsell when they attempt to reverse the uptrend to lock in their profit. When they sell, the price will drop and you will profit from their actions. If you cannot beat, while not join them.

That is why Bursa is heavily manipulated by syndicates and much ROI unless u play big positions.